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A limitless drug plan (health)

Mrs. E.’s employer provided everyone in her company with extended health care coverage through a group plan. The plan reimbursed her for 80% of her drug costs, with no limit on cost or any other limits. On her 75th birthday, her company benefits would end.

When she was 35, Mrs. E. was diagnosed with a severe liver disease. Her doctor, the leading Canadian specialist in this disease, prescribed Drug A, which costs more than $500,000 per year. It was clear that Mrs. E.’s condition would require life-long treatment.

For the first three months, Mrs. E. was reimbursed for the drugs. Afterward, the insurance company told her that another drug (Drug B) was available for free through a special provincial drug plan that covered expensive therapies. The insurance company declined her future coverage for Drug A.

Mrs. E. appealed this decision. The insurance company’s Ombudsman recommended that the claims department speak with her doctor. This doctor told them that Drug A was prescribed only because he did not want to burden the public plan with the cost of the medication, since Mrs. E.’s group plan provided ample coverage. In its’ final position letter, the insurance company declined payment, explaining that there was no reason why Mrs. E. could not take the free Drug B. The company told Mrs. E. that if she was not satisfied with the decision, she could ask OLHI for an independent, impartial and free review of the case.

Not long after, OLHI received a request to become involved. Our Dispute Resolution Officer (DRO) carefully reviewed the insurance policy, noting that there were no limits on the dollar amount for drug claims and there were no other limits or exclusions. Going through the insurance company’s files, he saw a comment from the company’s Ombudsman noting the same things and suggesting that the claims department reconsider the denial. The DRO recommended this be escalated to an OmbudService Officer (OSO) for further review, particularly because he was unsure about whether Mrs. E. would even qualify under the special provincial plan.

OLHI’s OSO discovered that Mrs. E. could get full coverage for not only Drug B but also for Drug A through the provincial plan. As a result, the insurance company did not have to continue paying for her treatment.


Disclaimer: Names, places and facts have been modified in order to protect the privacy of the parties involved. This case study is for illustration purposes only. Each complaint OLHI reviews contains different facts and contract wording may vary. As a result, the application of the principles expressed here may lead to different results in different cases.